The start of a new year seemed like an auspicious time to check in with our readers. What kind of year was 2010? And what do they expect for 2011?

Mike Shaver, president of Mountain V Oil & Gas, Bridgeport, West Virginia, says 2010 was tough—maybe as tough as 2009. He's the sole owner of a small independent he co-founded with his father in 1994. The company owns and operates some 460 wells in West Virginia and Pennsylvania. Over the past decade, he's sold assets to Linn Energy, Range Resources Corp. (Mountain's Pennsylvania Marcellus assets went to Range in November 2009) and Exco Resources Inc.

Long hedges have bolstered economics for 85% of the company's natural gas production, with a blended price of $6 through 2012.

"I have always believed you operate like prices are at $2 no matter where they are," he says. He retains a 50% interest in drilling prospects and is funded by Bank of Oklahoma and joint ventures with a private capital group.

Mountain V drilled its first horizontal well in August in the Big Injun sandstone, which underlies the Big Lime, in Kanawha County, West Virginia. The well went to 1,800 feet total vertical depth, with a 2,500-foot lateral, and is producing about 220,000 cubic feet per day with little fluid and "zero decline." The company drilled 18 vertical Marcellus wells in 2009 and in 2011 will step up horizontal action with four laterals in the shale and nine verticals.

Shaver says access to capital is his biggest challenge for 2011, followed by concerns about market constraints for moving gas. He's excited about using horizontal drilling to develop a larger reserve base and pad drilling to reduce environmental impacts and drilling costs. Acquisitions are also in the forecast for 2011.

Next we talked with Midcontinent-based investor Singer Bros. LLC, with offices in Oklahoma City and Tulsa. Since its founding in 1962 by the fathers of the current managers and co-CEOs, first cousins David P. and George A. Singer, the company has preserved a focus on the oil patch while diversifying. "We try to maintain an array of assets so that when times get tough in the oil business, we have other investments on which to rely," says David Singer.

The company's affiliate, Pedestal Oil Co. Inc., acts as operator on both purchased interests and in-house generated prospects. Singer Bros. has successfully hedged production in the past, particularly during 2009. Its production mix has varied based on both geological targeting and price fluctuations; formerly it had an almost three-to-one weighting in favor of natural gas, today's income is closer to 50-50. With interests in about 25 states, current production is strongest in Oklahoma, Texas, Kansas, Louisiana and New Mexico.

The company has begun actively participating in horizontal wells. In addition to others' horizontal prospects, it uses its several thousand, company-owned mineral tracts as opportunities for horizontal participation. Recently, it took a 2.3475% interest in the Apache Corp.-operated Thetford #4-23 in the Hogshooter Granite Wash play in Beckham County, Oklahoma. Initial production was 2,000 barrels of oil and 5 million cubic feet of gas per day; despite costing $9 million-plus, the well should pay out in about four months.

The company owns interests in a couple of community banks, has an investment in a biomedical technology company and participated in the construction of a liquefied natural gas plant in Arizona that helps fuel buses in Phoenix and Tempe.

"We don't just stick to drilling wells and/or buying up oil production," says David Singer. "We're opportunists and look hard at everything that comes our way."

For exploration and operating company Cypress Production, based in Azle, Texas, financing its steadily growing drilling program is the top challenge, says Michael Morris, president. The company is focused on normally pressured oil plays onshore South Louisiana and onshore South Texas. It has licenses to more than 70 3-D seismic data sets and is working with four geosciences teams. It drilled six prospects in 2009, and plans to drill 10 in 2011.

Currently, drilling is funded internally out of production cash flow, through industry partners, and through limited partnerships in Europe. "Many of the drilling dollars available for conventional plays have fled to the funding of the resource plays," he notes.

"However, there has been some push back from these plays based on lower returns than forecast. Also, many companies have moved offshore drilling dollars to onshore plays in response to lower gas prices, high insurance costs and government regulation."

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